Question 1

The first three schedules to complete when preparing the master operating budget are the

Accepted Answer

A)  revenue budget, production budget, and direct materials purchases and usage budget. 
B)  costs of goods sold budget, production budget, and cash budget. 
C)  revenue budget, overhead budget, and production budget. 
D)  revenue budget, cash inflows, and production expenditures. 
E)  revenue budget, costs of goods sold budget, and production budget. 
A)  revenue budget, production budget, and direct materials purchases and usage budget. 
B)  costs of goods sold budget, production budget, and cash budget. 
C)  revenue budget, overhead budget, and production budget. 
D)  revenue budget, cash inflows, and production expenditures. 
E)  revenue budget, costs of goods sold budget, and production budget.

Question 2

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:
  
-What are the 2012 budgeted costs for direct manufacturing labour?

Accepted Answer

A)  $248,000 
B)  $247,200 
C)  $249,000 
D)  $246,600 
E)  $246,000 
A)  $248,000 
B)  $247,200 
C)  $249,000 
D)  $246,600 
E)  $246,000

Question 3

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

Accepted Answer

Sensitivity analysis is a "what-if" tech

Question 4

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

A controllable cost is a cost that is not subject to the influence of a given manager of a given responsibility centre for a given time span.

Accepted Answer

A) True 
 B)False

Question 6

Budget Corporation has the following budgeted sales for the next six-month period:
   There were 30,000 units of finished goods in inventory at the beginning of September. Plans are to have an inventory of finished products that equal 20 percent of the unit sales for the next month.
Five kilograms of materials are required for each unit produced. Each kilogram of material costs $10. Inventory levels for materials are equal to 30 percent of the needs for the next month. Materials inventory on September 1 was 10,000 kilograms.
Required:
a. Prepare production budgets in units for October, November, and December.
b. Prepare a purchases budget in kilograms for October, November, and December, and give total purchases in both kilograms and dollars for each month.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& *0.3 times next month's nee

Question 7

The objective of activity-based budgeting is to refine the budgeting process by partitioning indirect costs into different homogeneous activity cost pools.

Accepted Answer

A) True 
 B)False

Question 8

Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units. How many units should be produced?

Accepted Answer

A)  14,600 units 
B)  13,400 units 
C)  10,600 units 
D)  9,400 units 
E)  7,250 units 
A)  14,600 units 
B)  13,400 units 
C)  10,600 units 
D)  9,400 units 
E)  7,250 units

Question 9

Boone Hobbies budgeted purchases for next month is expected to be

Accepted Answer

A)  $240,000. 
B)  $264,000. 
C)  $225,000. 
D)  $360,000. 
E)  $244,000. 
A)  $240,000. 
B)  $264,000. 
C)  $225,000. 
D)  $360,000. 
E)  $244,000.

Question 10

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:
  
-Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labour operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labour rate for molding is $20 per molding hour and the direct labour rate for polishing is $25 per polishing hour. The expected number of hours of direct labour for Bigger is

Accepted Answer

A)  8,800 hours of molding; 17,600 hours of polishing. 
B)  11,200 hours of molding; 22,400 hours of polishing. 
C)  17,600 hours of molding; 8,800 hours of polishing. 
D)  22,400 hours of molding; 11,200 hours of polishing. 
E)  10,000 hours of molding; 20,000 hours of polishing. 
A)  8,800 hours of molding; 17,600 hours of polishing. 
B)  11,200 hours of molding; 22,400 hours of polishing. 
C)  17,600 hours of molding; 8,800 hours of polishing. 
D)  22,400 hours of molding; 11,200 hours of polishing. 
E)  10,000 hours of molding; 20,000 hours of polishing.

Question 11

The production budget of a manufacturing company is prepared after the revenue budget.

Accepted Answer

A) True 
 B)False

Question 12

Answer the following question(s) using the information below.
The following information pertains to Tiffany Company:
   • Cash is collected from customers in the following manner:
   • 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
• Labour costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.
• The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
-How much cash will be paid to suppliers in March?

Accepted Answer

A)  $23,200 
B)  $28,000 
C)  $44,000 
D)  $24,800 
E)  $17,600 
A)  $23,200 
B)  $28,000 
C)  $44,000 
D)  $24,800 
E)  $17,600

Question 13

Perry Company has gathered the following information:
   Perry desires to keep a minimum cash balance of $20,000.
Required:
Prepare a cash budget for May, and indicate whether or not Perry meets minimum cash requirements.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Cash disbursements

Question 14

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Accepted Answer

A) True 
 B)False

Question 15

Winnie and Pooh have just purchased a small honey manufacturing company that was having financial difficulties. After a brief operating period, they decided that the company's main problem was lack of any financial planning. The company made a good product and market potential was great.
Required:
Explain why a company needs a good budgeting plan. Specifically address the need for a master budget.

Accepted Answer

The master budget is a series of interre

Question 16

Answer the following question(s) using the information below.
Furniture Inc. estimates the following number of mattress sales for the first four months of 2013:
   Finished goods inventory at the end of December 2012 is 1,500 units. Target ending finished goods inventory is 30% of the next month's sales.
-How many mattresses need to be produced in the first quarter (January, February, March) of 2013?

Accepted Answer

A)  18,500 mattresses 
B)  19,400 mattresses 
C)  20,900 mattresses 
D)  22,400 mattresses 
E)  18,000 mattresses 
A)  18,500 mattresses 
B)  19,400 mattresses 
C)  20,900 mattresses 
D)  22,400 mattresses 
E)  18,000 mattresses

Question 17

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:
  
-How many ceramic vases need to be produced in 2012?

Accepted Answer

A)  5,900 vases 
B)  6,100 vases 
C)  7,000 vases 
D)  6,000 vases 
E)  6,300 vases 
A)  5,900 vases 
B)  6,100 vases 
C)  7,000 vases 
D)  6,000 vases 
E)  6,300 vases

Question 18

The following information pertains to Amigo Corporation:
   Cash is collected from customers in the following manner:
   * Customers paying in the month of sale receive a 2% cash discount.
40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
Required:
a. Prepare a summary of cash collections for the 4th quarter.
b. Prepare a summary of cash disbursements for the 4th quarter.

Accepted Answer

a. Cash collections Oct $36,44

Question 19

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:
  
-How many pool cues need to be produced in 2012?

Accepted Answer

A)  22,500 cues 
B)  18,000 cues 
C)  20,000 cues 
D)  19,500 cues 
E)  20,500 cues 
A)  22,500 cues 
B)  18,000 cues 
C)  20,000 cues 
D)  19,500 cues 
E)  20,500 cues

Question 20

Discuss the importance of the sales forecast and items that influence its accuracy.

Accepted Answer

All other budgets are based on informati

The first three schedules to complete when preparing the master operating budget are the

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.

A controllable cost is a cost that is not subject to the influence of a given manager of a given responsibility centre for a given time span.

The objective of activity-based budgeting is to refine the budgeting process by partitioning indirect costs into different homogeneous activity cost pools.

Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units. How many units should be produced?

Boone Hobbies budgeted purchases for next month is expected to be

The production budget of a manufacturing company is prepared after the revenue budget.

Perry Company has gathered the following information: Perry desires to keep a minimum cash balance of $20,000. Required: Prepare a cash budget for May, and indicate whether or not Perry meets minimum cash requirements.

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Discuss the importance of the sales forecast and items that influence its accuracy.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 6: Master Budget and Responsibility Accounting

The first three schedules to complete when preparing the master operating budget are the

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.

A controllable cost is a cost that is not subject to the influence of a given manager of a given responsibility centre for a given time span.

The objective of activity-based budgeting is to refine the budgeting process by partitioning indirect costs into different homogeneous activity cost pools.

Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units. How many units should be produced?

Boone Hobbies budgeted purchases for next month is expected to be

The production budget of a manufacturing company is prepared after the revenue budget.

Perry Company has gathered the following information: Perry desires to keep a minimum cash balance of $20,000. Required: Prepare a cash budget for May, and indicate whether or not Perry meets minimum cash requirements.

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Discuss the importance of the sales forecast and items that influence its accuracy.

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets, Variances, and Management Control: I

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters